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Friday, January 27, 2017

Flipkart: Million-Dollar Hiring Mistakes

As the week drew to a close, a story that broke headlines in the world of Indian e-commerce was the departure of Flipkart’s Chief Product Officer, Punit Soni. Rumours had started swirling about Punit Soni’s impending exit since the beginning of the year (link), almost immediately after Mukesh Bansal had taken over from Binny Bansal as Flipkart’s CEO (link).

Punit Soni’s LinkedIn headline

Punit Soni was among a clutch of high-profile hires made by Flipkart in 2015, rumoured to have been paid a million dollar salary (amounting to 6.2 crores at then prevailing currency exchange rates — see this and this). This was in addition to any stock options he and other similar high-profile hires earned.One decision that Punit Soni was most closely associated with was the neutering of Flipkart’s mobile-web execution, where he killed Flipkart’s mobile site, forcing users to download the app on smartphones. The mobile app itself was poorly designed, had a mostly unusable interface, and was riddled with bugs to the point of crashing every few minutes. I had written in detail on its mobile app’s state in 2015 (see this article in dna, or from my blog). At the time I had expressed my astonishment that Myntra, the fashion e-tailer that Flipkart acquired and which had gone app-only, had a mobile app that was NOT optimized for the iPad. The same was the story with the Flipkart app — no iPad-optimized app, but a “universal” app that ran on both the iPhone and iPad devices. Even today, the Flipkart iPad app does not support landscape-mode orientation, even as Amazon’s iPad app has grown from strength to strength.

If hiring Punit Soni was a million-dollar mistake, or whether there was simply a mismatch of expectations between employee and employer, or whether Punit Soni’s exit the inevitable consequence of the favoured falling out of favor with the ascension of a new emperor, it does not appear as if Flipkart has learned any lessons. His replacement is said to be yet another ex-Googler, Surojit Chatterjee.

Whether Surojit will fare any better than his predecessor is best left to time or tea-leaf readers, this hire however does exemplify the curse of VC money in more ways than one. First, free money leads to the hubris of mistaking outlay with outcomes — splurging a million dollars on a paycheck with the outcome of success in the e-commerce battles. Second, VCs pay the piper (Flipkart is nowhere close to being profitable), and therefore they decide the tune. If VCs want an executive from a marquee company like Google, Flipkart’s founders may well have no say in the matter. Third, in the closed network of venture funding and Silicon Valley, the you-scratch-my-back club ensures lucrative job mobility for professionals and VCs alike.